Adify, the self-service / white-label online ad network, has been sold to Cox Communications for $300M (according to a story by PaidContent). Adify had apparently been out raising another round of funding recently, so it is not surprising that strategics entered into the process and that acquisition offers were part of the discussion. But I am a bit surprised by both the ticket price ($300M!) and the acquiror. Adify had raised a total of $27M (plus $4M – debt) over two rounds from Venrock, USVP, and Peacock(GE/NBC’s investment fund), so the investors made a nice return on the deal.
Adify’s platform enables other publishers / companies develop their own ad network – allowing publishers and advertisers to interact directly. This provides media portals like Martha Stewart Living Omnimedia to create their own ad network and negotiate the ad rates and T&Cs directly with their advertisers. This approach is another way to address the challenge of monetizing today’s increasingly fragmented online audience, and is an alternative to the vertical ad networks that we are seeing more and more of these days (Glam Media, Federated Media, Sportgenic, Giant Realm, Travel Ad Network, etc). Both approaches are attempting to serve targeted ads to mid to long tail domains by amassing publisher ad inventory across numerous sites that attract a particular demographic or type of consumer.
While it does make sense for a cable company to get into this publisher centric ad network business, it was surprising to see Cox because Cox has very little online presence. That said, it will be very interesting to watch what Cox does with the business, specifically as it relates to the recently announced Project Canoe – the national cable ad network…
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